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A house is for sale for $640,000. You have a choice of two 30-year mortgage loans...

A house is for sale for $640,000. You have a choice of two 30-year mortgage loans with monthly payments: Loan 1: Receive $590,000 at 7% with 30-year maturity or Loan 2: Receive $540,000 at 6% with 30-year maturity. What is the effective annual rate of interest on the additional $50,000 borrowed on the first loan?

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